I found out quite a bit. You can find the general details by
doing a google search on Gardasil.
Wikipedia also has an article. But it appears there is also another drug due
to Glaxo Smith Kline called Cervarix which vies for the same maket. So, check out Cervarix also.
Merck’s total revenues in 2012 were about $47 billion of
which about $1.6 billion came from Gardasil. Thus about 3.4% of the revenues
are accounted for by Gardasil. Gardasil
also seems to have had an increase of 35% in sales in 2012. Given all this and the current news item, it
is fair to expect some significant increase in sales of Gardasil in the USA and
Europe Since by now most R&D
expenses would have been amortized, I would guess that this drug will probably
give a much bigger increase to the net revenue of MRK although the drug may
today account for only 3% of the total revenue of MRK.
Compared to Gardasil, Cervarix seems to have hit only a 0.5
Billion revenue figure. Gardasil seems
to have gained ground quite a bit. For
example, the government plans in UK seem to have adopted Gardasil.
Per MorningStar on which I rely much, MRK enjoys a wide
moat, sells now at 46.31 and is assessed
to have a fair value of 51. Its
acquisition of Schering-Plough is considered a big plus. MRK appears in the top 10 holdings of several
very successful mutual funds with excellent returns over the long horizon. It also appears in several of the screens for
selecting stocks.
All that makes me quite interested in MRK for the next few
years. I am inclined to believe that the news today
will be a shot in the arm for MRK. Even
if it is not that great, as a company this is one that I would like to have in
my portofolio for the longer haul. Let
me just hope that the smart money has not moved in tonight and pushed the price
of MRK much higher.
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